The coupon on the Yuan-denominated bonds was set at 4%, which will be equivalent to 170 basis points over six-month Libor, a banker said.

“The choice of currency depends on which one is providing the cheapest funding at a particular time. In times of such volatility, the yuan is a more resilient currency and is currently providing much cheaper funding than the US-dollar,” an investment banker said.

If swapped, the funds raised through this issue will be 60 bps below the yield at which ICICI Bank's dollar bonds maturing in 2016 are quoted in the secondary market.

This is the third time that ICICI has raised funds through dim sum bonds, having raised 500 million yuan each in the last two tranches issued in 2011 and 2012.

The orderbook size was 1 billion yuan from 47 investors, with about 65% of the investors from Hong Kong. The issue snaps a month-long pause of bond issuances by Indian companies in the overseas market after US benchmark treasury yields turned volatile fearing a pullback in the US Federal Reserve's quantitative easing programme.

Comments made by the Fed chief Ben Bernanke on May 22 have led to concerns of tighter liquidity, which has forced issuers to hold back their borrowing plans in the overseas market. Only one Asian issuer, outside of Japan, has priced a US dollar bond since May 22.

Standard Chartered and HSBC are joint bookrunners on the latest ICICI bond deal and the book iss expected to close later in the day. ICICI Bank issued the bonds via its Dubai branch. The bonds are a part of ICICI Bank’s $5 billion medium-term notes (MTN) programme. In January, the bank had raised Singapore dollar $225 million through seven-year bonds at a coupon rate of 3.65%.

The bond has a Reg S status, which means the bond doesn't need to be registered with the US Securities & Exchange Commission and can be offered to only non-US residents.

Meanwhile, rating agency Standard & Poor (S&P) has given a BBB- rating to the senior unsecured renminbi notes and Moody's Investors Service has assigned a Baa2 rating to the issue.

Between January and May, 17 Indian companies raised about $11 billion by issuing bonds in